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WBCSD Risk Publication 2016
WBCSD Risk Publication 2016
Peter Bakker
President and CEO
WBCSD
1
Executive summary
An organization’s enterprise risk management
function plays a critical role in monitoring and
managing the risks and opportunities that stem
from the internal and external forces that can
impact a company’s profitability, success or
even survival.
Risk management experts across academic and consulting institutions alike
perceive that the impact of economic and legal risks on a business and
society are steadily giving way to a raft of existing and emerging social and
environmental risks. And yet there is evidence that the effectiveness with which
organizations are identifying, managing and disclosing these risks is limited:
I. Comparing WBCSD member company sustainability and risk disclosures
reveals that, on average, only 29% of the areas deemed to be “material” in
a sustainability report were disclosed in a company’s legal disclosure of risks.
Notably, 35% of member companies did not disclose any of the sustainability
risks identified in their sustainability reports in their legal filings.
II. Discussions and surveys with risk management and sustainability
practitioners show that most practitioners (89%) agree that sustainability
risks could lead to a significant impact on business, while more than
70% find that “risk management practices are not adequately addressing
sustainability risks”.
III. The number of real-world incidences of companies failing to adapt to,
respond to or mitigate social and environmental risks is increasing, from
environmental disasters and oil spills to natural disasters, conflict minerals,
human trafficking and cyber security.
2
The WBCSD believes that understanding the These organizational challenges are exacerbated
causes of this breakdown is the first step to further by a fast-changing global environment,
addressing this situation. Although more work is outdated institutional and capital market norms, and
to be done, initial investigations point to a range of a gap or absence in regulation around sustainability
internal organizational forces and innate features of risk disclosure.
sustainability risks impacting the effective management
of sustainability risks: The WBCSD believes that advancing a framework and
building capacity to foster sustainability-conscious
–– Some companies have limited knowledge of enterprise risk management is a critical step toward
sustainability, which inhibits the capture of emerging building the long-term prosperity of companies and
sustainability risks. the societies on which they depend. The first steps in
achieving this include:
–– Sustainability assessments will often reveal
sustainability opportunities as well as risks; these –– Enhancing the application of existing risk
opportunities are not always being identified and management frameworks, such as COSO, to
captured in enterprise risk management. better identify and manage emerging or strategic
–– Sustainability risks are often more challenging to sustainability risks.
quantify than traditional risks. –– Developing interpretive risk management guidance
–– There is often a lack of collaboration between for sustainability risks.
sustainability and enterprise risk management –– Leveraging WBCSD capacity building and education
functions. workstreams in order to enhance sustainability in
–– The sustainability risk outlook timeline is longer than risk management.
that of traditional risks. –– Understanding and addressing the disclosure gap.
–– Legal filings use different language than
sustainability reports.
–– Sustainability reports and mainstream corporate risk
disclosures have different audiences and purposes.
–– Existing risk management frameworks may not
provide enough guidance to companies to manage
sustainability risks.
3
I Introduction
No business is managed without access
to reliable, accurate and timely information.
However, studies by the WBCSD and others
confirm that even forward-looking businesses
typically capture data on social and natural
capital priorities and risks only once or, at best,
twice a year, and in some cases not at all.
At the same time, companies experience
continued pressure to review and transform
their business strategies to remain competitive.
New types of risks are constantly emerging,
including those inherent in the increased
importance of environmental and social
sustainability in business.1
WBCSD’s Redefining Value program was
created in 2014. One of its aims is to make
material sustainability impacts and
dependences part of day-to-day business
management. Various Redefining Value
workstreams support businesses in scaling
up their sustainability initiatives with accurate,
timely, reliable and comparable management
information.
4
Risk or opportunity? Enterprise risk management basics
Risk perception is the subjective judgment that The ERM function of a business is critical to monitoring
people make about the characteristics and severity and managing the risks and opportunities that stem
of risk. Its study bridges many disciplines – cognitive from internal and external forces – whether social,
psychology, neuroscience, behavioral economics, environmental, legal, political, technological and/
sociology and anthropology, etc. – but all seek to or economic. An enterprise-wide focus allows the
understand how people process information and company to filter out the risks that would have the most
act based on that information. Humans receive and significant impact on the entire company and aggregate
process risk-related information constantly and make those which might be present across multiple
decisions accordingly. Humans know instinctively departmental silos.
when something is dangerous and mostly try to avoid
it. They know through experience that other signals ERM processes are critical to dealing with business
may require protective reactions. Humans know uncertainty, mitigating hazards and complying with
through education, cultural norms and upbringing what regulations. Within an organization, enterprise risk
constitutes right and wrong and again mostly react management drives companies to identify and measure
accordingly. However, humans all acknowledge risk risks and balance the company’s exposure to risk
and react to it in varying ways. The same can be said against reward in the context of the company’s risk
for a company’s relationships with risk. profile, long-term business objectives and stakeholder
expectations. Also critical is a process to communicate
Risk and its sibling opportunity are also central to to shareholders the most significant risks and
business and investment strategies – many successful opportunities and how the company is responding.
businesses and investments are the result of risk taking.
With the separation of ownership and management
in large businesses, the role of corporate governance
has expanded to include risk disclosure. Around the
globe, regulations have been enacted that require the
disclosure of risks in mainstream corporate reports
and filings; many jurisdictions, such as European Union
member states, require risk disclosures.
The primary objective of such disclosures is to inform
the report users of the possible material issues that
could impact the organization in order to inform investor
decision-making. Management understanding of
the risk profile and the taking of corrective action are
fundamental to robust and effective enterprise risk
management (ERM).2
1
chroeder, 2014.
S
2
Enterprise risk management is the “the culture, capabilities, and practices, integrated with strategy-setting and its execution, that organizations
rely on to manage risk in creating, preserving, and realizing value.” COSO, 2016.
5
Introduction
There are a variety ways to categorize organizational Most enterprise risk management frameworks include
risks. One way is based on the nature of the risk and a centralized function that performs, at a minimum,
how management responds to or manges that risk, the following:
as defined in an article published by the Harvard
Business Review (summarized in Figure 1).3 –– Risk identification: Processes to scan their
environments for new and emerging risks and
1: Categories of risk that impact a company
opportunities and to maintain an understanding
Preventable risks of existing risks.
Description Examples –– Risk assessment: Processes to evaluate, quantify
Internal risks, arising from Risks from employees’ and and prioritize enterprise risks.
within the organization, that managers’ unauthorized,
are controllable and ought illegal, unethical, –– Risk response: Processes to determine and
to be eliminated or avoided. incorrect or inappropriate implement an appropriate response to identified risks
actions; Risks from based on the company’s appetite for risk.
Preventable risks are best breakdowns in routine
managed through active operational processes. –– Communication and disclosure: Disclosure of the
prevention: monitoring company’s “material” risks to investors and to meet
operational processes and regulatory requirements.
guiding people’s behaviors
and decisions toward
To support these activities, the ERM function will
desired norms.
typically engage with the other business functions,
Strategic risks including finance, supply chain, human resources,
legal and sustainability.
Description Examples
Strategic risks are different May include the risk of
from preventable risks not capturing potential
because they are not organizational gains – such
inherently undesirable. as the tension between
the decision to invest in
Strategic risks cannot product development
be managed through a and innovation versus the
rules-based control model. decision not to make this
Instead, a risk management investment, which may
system designed to reduce impact market share.
the probability that the
assumed risks actually
materialize and to improve
the company’s ability to
manage or contain the risk
events should they occur
is needed.
External risks
Description Examples
Some risks arise from Sources of these risks
events outside the include natural and political
company and are beyond disasters and major
its influence or control. macroeconomic shifts.
As companies cannot
prevent such events
from occurring, their
management must focus
on their identification
(they tend to be
obvious in hindsight)
and the mitigation of
their impact.
3
Kaplan and Mikes, 2012.
6
Role of ERM
The literature shows the importance of enterprise risk
management to organizational success. A study by EY
found that companies with mature risk management
practices outperformed their competitors financially, Film company captures and responds
with companies ranked in the top 20% in terms of risk to a strategic risk
maturity reporting earnings three times higher than that When the managers of a camera film company
of companies in the bottom 20%.4 considered potential risks likely to affect its sustainable
revenue growth business objective, they determined
In recent years, it has also been identified that ERM that technology was shifting and consumers were
practices are pivotal to adapting to the changing looking toward the possibility of digital photos.
This change indicated an uncertainty: a likely decline
complexity of risk, enhancing alignment among
in future demand for the company’s current products.
strategy, performance and ERM, recognizing the In response, management identified ways to develop
globalization of markets and operations, and expanding new products and improve existing ones, which
reporting to address expectations for greater allowed the company to maintain revenue from existing
stakeholder transparency.5 customers (preserving value) and to create additional
revenue by appealing to a broader consumer base
(creating value).
The ERM function collaborates with other business functions to identify and respond to external forces
that may impact the business. Risks are disclosed to investors and other interested stakeholders in a
company’s legal risk filings, annual report and sustainability reports
Social
Environmental
Sustainability Sustainability
Legal function report
Political
Technological
4
EY, 2013
5
COSO, 2016, p. iv.
6
Accenture, 2013.
7
Introduction
As shown in Figure 3, more than half (53%) of member A 2013 survey conducted by the Ponemon Institutes8
companies specified in their annual report that they asked business practitioners whether, in their opinion,
the management of “information security risk” is an
use one of the standard ERM frameworks. The most “art” or “science”.9 The survey found that:
commonly adopted is the COSO framework (34%)
followed by the ISO framework (9%). While some In the US, 49% of respondents said “art” and 51%
companies did not disclose the adoption of any of said “science”.
the standard frameworks, interviews revealed that
many have developed their own, adjusting an existing In the UK, 58% of respondents said “science” and
42% said “art”.
framework to fit company culture and geography.
3: Member company disclosure on use of ERM framework
The “science” will typically include a multitude of tools
to support the quantification and monetization of risks,
ISO 9%
such as decision trees, scenario analysis and financial
Other 11% modeling. The “art” is the analysis and decision-making
e.g. AMF, Turnbull
based on intuition, expertise and a holistic view of
COSO 34% the organization.
Not Specified 47%
7
Issued in 2004 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the Enterprise Risk Management –
Integrated Framework is one of the most widely recognized and applied enterprise risk management frameworks in the world. It provides a
principles-based approach to help organizations design and implement enterprise-wide approaches to risk management. This framework
is currently under review with an exposure draft entitled Enterprise Risk Management – Aligning Risk with Strategy and Performance with a
proposed publication date of 2017.
8
4: Art and science – general consensus says that both must
be leveraged in enterprise risk management
Art
Understanding the risks and their likely
impacts on the business requires an astute
and often intuitive understanding of risk,
strategy and human behavior.
Intuition
People acumen
Business acumen
Industry experience
“Gut feeling”
Science
Formal tools and techniques are important in
order to systematically identify, evaluate and
monitor business risks and the impacts of any
risk management strategies or initiatives.
Decision trees
Monte Carlo
Value at Risk (VaR)
Stress testing
Scenario analysis
Forecasting
Modeling uncertainty
Risk quantification
8
he survey respondents included 749 US and 571 UK-based professionals in the following areas: IT security, IT operations, IT risk management,
T
business operations, compliance/internal audit, and enterprise risk management. Survey respondents had an average of 10.7 years of
experience and represented a wide variety of organization sizes and industries, including financial services, healthcare and pharmaceuticals,
technology and communications, retail, and the public sector. Ponemon Institute, 2013.
9
For the purposes of the survey, “art” is defined as analysis and decision-making based on intuition, expertise and a holistic view of the
organization. “Science” refers to risk analysis and decision-making based on objective, quantitative measures.
10
Schroeder, 2014, pp. 28-30.
9
II The evidence base
The research found an evidence base to
suggest that sustainability risks are not being
managed or disclosed effectively:
1. Sustainability risks disclosed in company
sustainability reports and legal filings are
not aligned.
2. A survey of sustainability practitioners and
risk management professionals revealed
challenges in integrating sustainability into
mainstream risk management.
3. There are historical examples of
consequences from companies failing
to integrate sustainability risks.
Yet in spite of this, capital markets, regulators
and shareholders are showing greater interest
in understanding how companies are managing
and responding to sustainability risks.
10
1 Sustainability risks disclosed in company
sustainability reports and legal filings are not aligned
A comparison between the material sustainability11 Notably, 35% of companies had no sustainability-risk
disclosures of 170 WBCSD member company disclosure alignment.
sustainability reports and their risk factors12 in
mainstream corporate reporting revealed that, on
average, only 29% of material issues disclosed in
sustainability reporting are also reported as risks in
mainstream reporting (“Alignment”). Put another way,
Less than one in three issues identified in sustainability
71% of sustainability issues that businesses deemed materiality assessments are disclosed as risk factors in
to be material were not disclosed to investors as legal filings for investors.
risk factors.
Changes in global
Preservation of biodiversity macroeconomic conditions
Human and labor rights Commodity market risks
Pollution and accidents Foreign currency risk
11
Includes issues or Respect for Compliance risk
risks that are defined indigenous people
as ”material” in a Stock price risk
materiality assessment, Sustainable use
Interest rate risk
listed in the upper right of resources
quadrant of a materiality Natural disasters
Climate change
matrix or defined as the
”focus area”.
Credit risk
12
Includes the risks
disclosed in the
”risk factors” section
of a SEC 10-K
or an equivalent
annual report.
11
Sustainability risks disclosed in company sustainability
reports and legal filings are not aligned
Some sectors demonstrated greater alignment than others. Analysis of alignment by sector shows that the strongest
performers tended to be in sectors for which sustainability information was more often sought by investors.13
6: Alignment between legal filings and voluntary disclosures by sector
Sectors with the greatest alignment –– Forest and paper products –– Utilities and power
–– Oil and gas –– Mining and metals
–– Conglomerate
Note: Categories above based on percent of alignment between member company sustainability report and legal filing. Strongest: >40%
alignment; middle of the pack: 20-40% alignment; weakest performers: <20% alignment.
13
EY, 2015, p. 18.
12
2 A survey of sustainability practitioners revealed
challenges in integrating sustainability into
mainstream risk management
In developing this report, a series of interviews, 7: P
erceptions on current state of sustainability risk
workshops and surveys were conducted with a management (survey of USBCSD/WBCSD members)
selection of WBCSD member companies to build an
understanding of the current state of ERM, including the
perceptions and challenges of managing sustainability
risk from the perspective of risk management and
Risk management
practices are not
adequately addressing
70%
agree
sustainability practitioners. sustainability risks”
13
3 There are historical examples of consequences from
companies failing to integrate sustainability risks
The World Economic Forum’s Global Risk Report 2016 At the same time, capital markets, regulators
reports that in 2016, societal and environmental risks and shareholders are showing greater interest in
represented 4 out of the top 5 global risks in terms of sustainability risks. Investors are increasingly expecting
likelihood and 3 out of the top 5 global risks in terms of companies to voluntarily report on sustainability
impact.14 This is a significant shift from ten years prior practices and disclose potential climate change impacts
when economic, geopolitical and technological risks on business.
comprised the majority of top global risks in terms of
impact.15 The report describes how the world has seen A 2015 survey of institutional investors conducted
such risks materialize in new and unexpected ways, by EY16 revealed that a majority of investors (61.5%)
with people, institutions and indeed entire economies consider nonfinancial data to be relevant to making
increasingly feeling the consequences of not heeding investments in all industry sectors, up from 34% in
the risks. For example, the report confirms the effects of 2014. Notably, 70.9% of investors see integrated reports
climate change and the rising frequency and intensity of as essential to making investment decisions, ranking
water shortages, floods and storms worldwide.16 them second in usefulness behind only companies’
annual reports.
14
ocietal and environmental risks include: large-scale involuntary migration, extreme weather events, failure of climate change mitigation and
S
adaptation, major natural catastrophes, water crises.
15
World Economic Forum, 2016, p. 4.
16
EY, 2015.
14
8: Tomorrow’s investment rules 2.0
Toward a new value paradigm A sharpened focus on potential for Toward new measures
– growing reliance on stranded assets due to ESG* factors of performance
nonfinancial information
2015
2014 80%
64% 2014 2015
64% 79%
36% 62%
81% 87%
Latin America Australia
All material derived from EY’s 2015 report, Tomorrow’s Investment Rules 2.0. *ESG is “environmental, social and governance.”
During interviews with member companies, one Finally, increasing numbers of stock exchanges are
company reported that as many as 40-50% of driving transparency on how companies are managing
questions raised at investor meetings were about sustainability issues. In addition to corporate risk
sustainability. Many of these are risk related, such as disclosure requirements, stock exchange governance
seeking to understand how the company is responding councils in more than 50 countries now require or
to the risk of hazardous chemical substances in the encourage some level of sustainability reporting or
supply chain. disclosure. Refer to figure 9 for a list of jurisdictions.
In addition, after a record-breaking year for shareholder
proposals in 2015, 41% of the total 2016 shareholder
proposals in the US submitted through June were
related to environmental and social topics. Furthermore,
average support for climate risk proposals jumped from
7% in 2011 to 28% in 2016. Shareholders continue to
request transparency from companies about social
and environmental management in operations and in
supply chains.17
17
EY, 2016.
15
There are historical examples of consequences from
companies failing to integrate sustainability risks
TO BE DESIGNED
For example, in Australia, the Corporate Governance –– How should companies categorize and define
Principle recommends that all listed entities establish sustainability risk and then prioritize? Is the traditional
a risk management framework and periodically review approach of ranking risk as a product of impact
the effectiveness of that framework. This should include and likelihood detrimental to sustainability risk
disclosing whether the entity has any material exposure management as such risks are perceived to be of
to economic, environmental and social sustainability low to remote occurrence relative to the business
risks and, if it does, how it manages or intends to reporting and management cycles?
manage those risks.18
–– Over which timescales should risk be assessed for
The following section seeks to understand why this internal management purposes and for external
breakdown in the inclusion of sustainability risks in disclosure if it is to capture sustainability-related
enterprise risk management processes exists. It raises risks effectively?
the following questions:
–– What is the threshold criterion for acting and
–– Are the current enterprise risk management reporting on risk?
frameworks effective at capturing emerging or
current sustainability risks? –– Where do companies need additional support in
applying the existing frameworks to a new and
–– What is the suitability of impact measurement tools continually changing risk agenda and landscape?
for determining the relative magnitude of sustainability
risk relative to all other risks?
18
Listing Rule 4.10.3 Corporate Governance Principle 7.
16
III Factors driving the
breakdown in sustainability
risk management
*Bar width refers to level of agreement of interviewees and sustainability professional feedback from the Pathways to Impact Conference.
17
1 Limited knowledge
of sustainability risks
Sustainability is a relatively new field and is changing 11: Top 10 risks, ranked by likelihood or impact
the course of many major business activities, from how
a company sources materials, to where they decide Likelihood
to build new facilities, to how they drive product and Top 10 risks
process innovation, or even the methods they use 1. Large-scale involuntary migration (Societal)
to attract and develop talent. In managing the risks 2. Extreme weather events (Environmental)
associated with sustainability, some companies are
challenged by a lack of understanding of sustainability 3. Failure of climate change mitigation or adoption
risks or the manner with which these risks could impact (Environmental)
the business. 4. Interstate conflict (Geopolitical)
5. Natural catastrophes (Environmental)
Another salient feature of sustainability risks is that
they are often also emerging risks. The Global Risk 6. Failure of national governance (Geopolitical)
Report 2016 produced by the World Economic Forum 7. Unemployment or underemployment (Economic)
identifies the top 10 risks by likelihood or impact
8. Data fraud or theft (Technological)
(see Figure 11). Over the last 10 years, this list has
transitioned from a focus on economic risks toward 9. Water crisis (Societal)
more societal, geopolitical and environmental risks19. 10. Illicit trade (Economic)
A report by the Institute of Chartered Accountants Impact
in England and Wales (ICAEW) similarly reports Top 10 risks
“that social, environmental and economic aspects
of sustainable development present business 1. Failure of climate change mitigation or adoption
opportunities but also potentially catastrophic (Environmental)
reputational risks that must be managed”. The report 2. Weapons of mass destruction (Geopolitical)
cites Professor Michael Power describing the myriad 3. Water crisis (Societal)
sources of reputational risk as requiring the “risk
4. Large-scale involuntary migration (Societal)
management of everything”.20
5. Energy price shock (Economic)
In addition, many sustainability risks, including a
6. Biodiversity loss and ecosystem collapse
number of those listed in Figure 11, can also be
considered “emerging” risks. They have come about 7. Fiscal crisis (Economic)
due to global and regional megatrends that were not 8. Spread of infection (Societal)
as prevalent or well-understood 20 years ago, such
9. Asset bubble (Economic)
as consumer empowerment, climate change and
resource constraints. A number of the WBCSD member 10. Profound social instability (Societal)
companies interviewed shared that they only started
to incorporate sustainability risks into risk management
Adapted from Global Risk Report 2016 (World Economic Forum)
processes in the past five years.
19
orld Economic Forum, 2016.
W
20
ICAEW, 2004.
18
According to COSO’s 2016 Enterprise Risk Building on this theme, the interviews explored how
Management: Aligning Risk and Strategy with companies are treating emerging sustainability risks.
Performance public exposure draft report: “emerging Interviewees described several challenges they
risks may not be understood well enough to identify experienced when seeking to capture and include
and assess accurately when they are first identified”.21 emerging sustainability risks in the ERM process:
Interviews with WBCSD member companies revealed
several instances that financial risks are given Emerging sustainability risks were omitted until it
more weight in risk management discussions than was understood that sustainability was central to
environmental or social risks, potentially for this reason. the business.
The research on risk disclosures examined the It was more challenging to incorporate
alignment between issues identified as material in a sustainability risks when we saw sustainability
sustainability report and subsequently included in the as an “add-on” and not central to the business.
company’s risk disclosures. The percentages in the Now that sustainability is well understood and
chart below show the frequency with which a category integrated in the business, it is much easier to
of sustainability risk was found to align between the two incorporate sustainability risks.”
reports. Longer standing risks, including governance,
economic, supply chain and climate change (which Our CEO was new to our industry, which is
includes natural disasters) risks, tend to have a higher more exposed to climate change than their
level of alignment. In contrast, some emerging risks, previous industry.”
including human rights, waste, product responsibility
and ecosystem services risks, were less frequently Conservatism prevents emerging sustainability
disclosed across both reports. risk inclusion:
12: Sustainability risks with the greatest alignment We are a conservative company, so it is
challenging to include some of the new social
or environmental risks. If we were to order how
Climate change 39%
we incorporate risk categories, it would be first
Governance 39%
economic, then social, then environmental.”
Economic 34%
Supply chain
practices 33%
Ecosystem 27%
services
Product
responsibility 27%
Society 19%
Waste and
effluents 18%
21
COSO, 2016, paragraph 240.
19
Limited knowledge of sustainability
inhibits capture of emerging risks
20
2 Omission of opportunities
or strategic risks
While a sustainability materiality assessment or More recent ERM guidance is encouraging a shift
sustainability report will often be used to explore from capital protection and reducing the number of
the range of risks and opportunities available to the preventable losses toward a more strategic function
company, a number of companies suggested that that can provide management with the risk information
the focus of the ERM process is typically more on it needs to consider alternative strategies. This evolution
managing downside risk than on opportunities. has been evident in the iterations of the 2016
COSO risk management framework exposure draft,
During interviews, some companies indicated that which “recognizes the increasing importance of the
their ERM function tended to be reactive in considering connection between strategy and entity performance”.23
sustainability opportunities. For one company, the risk
management team revealed while they do consider Disclosure of opportunities or strategic risk
some strategic risks, such as the risk of not acting on Even where sustainability issues and their contribution
an available product strategy; sustainability-related to strategy are being considered, the opportunities
strategic risks tend to be overlooked. Similarly, the and risks related to not pursuing opportunities will not
sustainability materiality assessments for a number typically be disclosed.
of companies point to opportunities around circular
economy practices and the associated risk of a Companies noted that instead of putting these
competitor investing in these practices to gain a risks in the legal filing (Form 10K or 20F), these
competitive advantage. However, in the absence of a types of opportunities tended to be discussed with
direct and measurable impact of the risk or regulation investors in other forums. In many cases, although
to drive change, this type of sustainability opportunity opportunities may address material risks, this is
tends to be omitted from the ERM process. considered competitively sensitive and therefore is not
readily disclosed.
As outlined in section I, strategic risks are quite different
from other types of risks in that they are not inherently
undesirable. For example, the risk of not innovating can
spur innovation. A variety of companies have attempted
to address this risk with varying degrees of success
in the past few decades: a camera film company “A key question of any strategy is whether it is
sustainable. Sustainability these days is defined largely
switching to digital; a cable company adjusting to in environmental terms. But is that broad enough?
the trend towards live-streaming. The success of What about those industries that are not resource
innovating to respond to such risks has significant extractors but resource users and enablers, such as
upside potential; however, the upside potential can be banks and financial services? Should they also be
at odds with the negative connotations around risk and concerned about sustainability? Of course they should
consequently omitted. if they want to survive and thrive over the long term.”
Another example of a company capturing strategic Rick Funston (refer to section IV for further information).
risks or opportunities involves a beverage company
witnessing consumer trends towards lower calorie
products. Although a sustainability issue relating
to nutrition, strategically this is just as significant
to business viability as hedging against currency
fluctuations or managing the corporate credit rating.
23
COSO, 2016, p. iv.
21
3 Difficulty quantifying
sustainability risks
As discussed in the introduction, irrespective of the type Lack of science applied to sustainability risks
or nature of the risk, companies will use a combination Once a sustainability risk has been identified, it can be
of art and science to evaluate, compare and prioritize challenging to credibly quantify the impact or likelihood
enterprise risks. A range of tools can be used to of the risk during the assessment phase.
translate risks into financial or quantified impacts.
Management then uses its own experience and context Risks are often evaluated and understood on the basis
to determine the risk’s impact and likelihood. of historical analysis. When a risk is still emerging or
poorly understood, it can be difficult to find historical
One company interviewed described this process as precedence or a tool to support quantification.
it relates to understanding the impact of pandemics on In addition, the tools familiar to risk professionals, such
their business: as those outlined in the diagram below, are not as well
understood by sustainability managers.
We evaluate the risk of pandemics. To do
this, we look for data provided by the Centre 13: Science tools and techniques
for Disease Control and the UN and align this
to the company’s geographical presence. Science
However, to then determine the level of risk Formal tools and techniques are important in
order to systematically identify, evaluate and
and the organizational approach, there will be monitor business risks and the impacts of any
a significant amount of judgment factored in.” risk management strategies or initiatives.
24
Schroeder, 2014.
22
Other companies also consider reputational risks, but Lack of art applied to sustainability risks
only if there is a direct financial link. As explained by 14: Art tools and techniques
one company:
Art
It is not enough to highlight to management that Understanding the risks and their likely
there might be a “reputational risk” associated impacts on the business requires an astute
with polluting a river. There needs to be a and often intuitive understanding of risk,
strategy and human behavior.
relationship between the action of the company
and the outcome. Having a financial impact Intuition
was an important step to demonstrate this link
People acumen
and also to prioritize the risk, when there are so
many risks to address.” Business acumen
Industry experience
An article by McKinsey25 similarly found that “Gut feeling”
“companies have some sort of process to identify
and rank risks, often as part of an enterprise risk
management program. While such processes can be As already noted above, sustainability risks are often
helpful, experience suggests that they often examine categorized as emerging risks. Megatrends such as
only the most direct risks facing a company and urbanization, resource constraints, climate change
typically neglect indirect ones that can have an equal and empowered consumers are shaping the way
or greater impact”. companies do business. Sustainability has impacted
functions across organizations: supply chain,
One company found that the indirect impacts of climate operations, product development, finance, reporting
change, such as rising water levels, are perhaps not and, of course, risk. Consequently, emerging risks
rated as high as they should be as a result of the affect multiple functions across a business.
challenges in identifying and quantifying this issue.
For another company, even though the impact may be For risks or opportunities that are emerging, new or
able to be quantified, the company has a difficult time complex, applying the art element of risk management
assessing the probability of whether or not there will be can be challenging since information is not as readily
a carbon tax. available. Even when high-quality data or quantification
of the risk is available, business managers do not have
the language or knowledge of the new risks to apply the
professional judgment needed to prioritize or respond
to the risk. This can lead to an inadvertent bias towards
Good practice example: risks with which executives are more familiar.
25
Lamarre and Pergler, 2009.
23
4 Limited cross-functional
collaboration
In many cases, ERM may not be effectively capturing The manner in which risk and sustainability functions
sustainability risks simply because the risk and collaborated varied across the companies interviewed.
sustainability functions are not communicating. The figure below summarizes these methods
Even when the risk and sustainability functions are of collaboration.
communicating, if sustainability is not speaking the risk
language, sustainability risks may be ignored.
Organizational structure
Integrated Collaborative Distinct
Sustainability and risk management Sustainability and risk management Sustainability and risk management
teams work as part of the same team, functions may be separate, but interact functions do not interact or collaborate
or include structures to allow flow of and collaborate to share processes,
processes and information tools and information
ERM process
Integrated Collaborative Distinct
No distinction between how The sustainability materiality Risk management and sustainability
sustainability and other risks assessment is an input to the risk issue or risk assessments are
are managed identification and assessment process completely separate processes
(and vice versa)
In practice
Integrated Collaborative Distinct
For two of the 20 companies One company’s sustainability group The same interviewee from the
interviewed, the person responsible recently moved into the strategic collaborative method noted that
for ERM was also responsible for planning group. The interviewee preceding their move into the strategic
sustainability. In these conversations, noticed an important organizational planning group, they were in the
the interviewees shared in-depth shift that also led to a shift in the public relations group. At that time,
discussions about how sustainability perception of sustainability within the the risk group was less willing to
issues are incorporated in the ERM company, which extended to engaging collaborate, seeing sustainability as
process from start to finish. These two with the risk team. a public relations topic rather than
interviewees were also able to articulate a strategic topic.
how each of their material issues
mapped to publicly disclosed risks.
To address this, sustainability professionals must and dependencies their company has and to listen,
ensure that risks, quantitative analyses and business solicit information about systemic risks, analyze the
solutions are central to the risk management agenda. information within the context of the company, and
Equally, risk professionals should be trained to empower response actions.
understand the sustainability impacts
24
Interviews indicated that strong collaboration
improved ERM practices
The interviews revealed that collaboration across
risk decision-makers and sustainability professionals
Good practice resulted in successful ERM practices and
greater alignment of risk disclosures and material
Many WBCSD sustainability executives are
experienced in monitoring and evaluating global
sustainability issues.
megatrends relating to environmental and social risks.
At organizations where these relationships were not
Approximately half of the companies interviewed stated
that the sustainability function plays an active role in in place, ERM often omitted sustainability issues.
the review of the risk register. Successful sustainability The omissions were frequently attributed to a lack
managers discussed the importance of translating of connection between sustainability risks and the
sustainability language to fit the ERM process. bottom line or due to challenges estimating the time
horizon with which the risk is expected to materialize.
These specific issues are addressed further in factors 3
Collaboration and risk evaluation in practice (difficulty in quantifying risk) and 5 (longer time horizons
The interviews also revealed that management-control for sustainability risks).
activities related to sustainability risks are not owned by
any one function. Instead, sustainability risks are owned
in the group most closely related to their exposure.
For example, sustainability risks relating to suppliers are
owned by procurement; product chemical use is owned Good practice
by quality; non-governmental organization actions are
owned by sustainability. A leading practice identified was to have a
sustainability professional sit on the ERM committee.
Challenges with this decentralized approach can This risk-sustainability collaboration gives a formal
surface for new or emerging sustainability risks. setting for sustainability risk discussions.
To illustrate, a supply chain vice-president is responsible
for all risks related to supply chain, and human rights
is simply one component. If the supply chain vice- Sustainability professionals can improve their own
president does not understand the potential impacts understanding of ERM to improve integration
of human rights issues in the supply chain, this can Multiple interviews noted that while a lack of
impact how human rights issues are assessed in the understanding of sustainability issues by risk
risk evaluation phase. The supply chain vice-president professionals can reduce the effectiveness of
may dismiss the impact or likelihood of human rights integration, similarly a lack of understanding of ERM
risks due to lack of knowledge of the emerging risk. by sustainability professionals can be the cause of a
Since sustainability subject matter professionals are breakdown. Some sustainability professionals revealed
familiar with emerging sustainability risks, collaboration that the reason they struggle to collaborate with the
and communication can improve the integration of risk management function is because they do not
sustainability in ERM. have a strong understanding of the ERM processes
at their companies.
Good practice
Sustainability documentation coupled with traditional
risk identification and analysis tools can provide risk
managers with information to support integrated risk
assessments. At a minimum, sharing the materiality
assessment results and associated quantitative data
with the risk function is critical to achieving this.
25
5 Longer time horizons
for sustainability risks
29
Funston and Wagner, 2010.
30
http://chiefexecutive.net/increase-your-chances-of-survival-as-ceo.
31
COSO, 2016, p. 71.
26
6 Differing language used for ERM
versus disclosures
The need to meet perceived language norms results in Why are there language changes?
material issues disclosed in a sustainability report being Interviewees identified the following reasons for legal
adjusted for inclusion in a mainstream corporate risk or other functions to amend the language in the
disclosure.32 risk disclosures:
Language selection –– The legal department strongly encouraged disclosure
The desktop research indicated a 29% alignment in of the minimum set of issues to maintain compliance
“material” sustainability issues in sustainability reports with regulations.
also being disclosed in corporate risk disclosures
in mainstream corporate filings. The percentage of –– Legal counsel sought to maintain a broad-based
alignment is based on an exact language match. language that would not need to change annually
To objectively analyze alignment, the desktop research given the rigor associated with stating each word
methodology used a word search seeking exact in the risk disclosure section.
language matches. To illustrate, if “human rights” –– The financial controller advocated that financial
represented a material sustainability issue but the risk audiences were not ready to read about a broad
factor section instead described the risk as “child labor”, group of risks.
this issue would have been considered to be “not
aligned”. For some companies, this subtle language –– The risk management function viewed the material
difference could suggest there is a lack of alignment sustainability risks as too numerous and requested
when in fact sustainability is effectively integrated into a reduction so that only the highest risks, as they saw
the ERM process. However, the difference begs the them, would be included.
question: Why did the language change?
This topic of language around disclosure is highly
Reporting gatekeepers make changes specialized and complex given varied global
For most companies, the risk disclosures in the regulations. As discussed in section V, the WBCSD
mainstream corporate filing are subject to a more plans to focus on this topic going forward to
rigorous review process than the material sustainability understand and synthesize global requirements around
issues disclosed in sustainability reports. sustainability and risk reporting and identify the root
causes behind language differences.
About one-third of companies interviewed indicated
that their legal counsel would omit or materially modify
the sustainability risks reported in the legal filings, while
all companies indicated that legal or corporate affairs
did change the language in some way.
32
ote: The research identified the two factors in the risk communication phase, but communication is not the focus of this report. As noted in
N
section V, the WBCSD plans to understand and convey more about communication differences in its next report on risk management.
27
7 Differing purposes for sustainability
versus risk disclosures
Sustainability issues noted in the materiality section It is therefore not surprising that most companies
of a sustainability report may also not appear in risk interviewed indicated that the list of material
disclosures because the audience and purpose of sustainability issues was longer than what could
those reports are inherently different.33 reasonably fit into the top risks for company risk
disclosures. If the definition of “material” was consistent
Audience: annual report vs. sustainability report within the organization, then this issue would not occur
Companies tailor communications to the target and all material issues identified from a sustainability
audience, which can result in significant differences in perspective would be material issues to the company.
communication for common topics. For mainstream
corporate reports containing legal risk disclosures,
target audiences are primarily shareholders and
regulators. For sustainability information, the
target audience widens to include a broad range
of stakeholders, including employees, customers, Good practice
communities and suppliers, among others. It is not Some companies cross-checked that the risks
surprising that differing audiences can lead to differing identified in the risk disclosures were reflected
disclosures. In the next year, the WBCSD plans to in the material topics outlined in sustainability
further explore why these differences are in place and communications and vice-versa. For one company,
to what extent the communication differences could or this practice was suggested by their independent
should be rectified. financial statement auditor.
Definition of materiality
Over the last decade, the concept of materiality has
been consistently referenced as both a problem and
a panacea in the development of so-called non-
financial, environmental, social and governance (ESG)
or corporate sustainability reporting. As a concept,
materiality holds out much hope of being the silver
bullet that results in the perfect amount of information
appearing in corporate reports – not too much and
not too little, but just right. However, the application
of materiality as currently understood and used has
not achieved this yet. Hundreds of articles have been
written on the use of materiality in corporate reporting,
ranging from the comparison with packing a backpack
for a hike (you can only take supplies that are crucial,
otherwise the weight will slow you down) to a study on
the genealogy of accounting materiality, which traces its
roots in philosophy, theology and social anthropology,
and everything in between.34
33
ote: The research identified the two factors in the risk communication phase but communication is not the focus of this report. As noted in
N
section V, the WBCSD plans to understand and convey more about communication differences in its next report on risk management.
34
Unpublished research on materiality by the Climate Disclosure Standards Board
35
WBCSD, 2016, p. 1.
36
U.S. Securities and Exchange Commission, 2011.
28
What is material? The International Accounting Standards Board (IASB)
As demonstrated in the table below, several different
definitions of “materiality” are used by the various Information is material if omitting or misstating it could
influence decisions that the primary users of general
regulatory and standard setting bodies. As 80% of purpose financial reports make on the basis of financial
WBCSD companies use the Global Reporting Initiative’s information about a specific reporting entity. In other
(GRI) G4,35 this definition largely drives the identification words, materiality is an entity-specific aspect of relevance
and reporting of material sustainability issues. For risk based on the nature and magnitude or both of the
disclosures in mainstream corporate filings, materiality is items to which the information relates in the context of
considered but disclosure depends on legal obligations. an individual entity’s financial report. Consequently, the
For the US, the Securities and Exchange Commission IASB cannot specify a uniform quantitative threshold for
(SEC) states: “‘Risk factors’ includes information about materiality or predetermine what could be material in a
the most significant risks that apply to the company or particular situation.
to its securities.”36 In the case of a US-based company,
International Integrated Reporting Council
there still may be many material risks, but the company
only discloses the most significant of those material A matter is material if it could substantively affect the
risks, thereby causing a disconnect in reporting. organization’s ability to create value in the short, medium
or long term.
SEC SAB 99
Human Rights Reporting and Assurance
A matter is material if there is a substantial likelihood that a Frameworks Initiative (RAFI)
reasonable person… relying upon the report would have
been changed or influenced by the inclusion or correction The RAFI framework states that materiality processes do
of the item… Financial management and the auditor must not adequately reflect human rights issues. By contrast,
consider both ‘qualitative’ and ‘quantitative’ factors in RAFI uses the concept of “salient human rights”.
assessing an item’s materiality. A company’s salient human rights issues are those that
stand out because they are at risk of the most severe
GRI Standards Definition negative impact through the company’s activities or
business relationships. The emphasis of salience lies on
The Materiality principle identifies material topics based on those impacts that are:
the following two dimensions:
–– Most severe: based on how grave and how widespread
–– The significance of the organization’s economic, the impact would be and how hard it would be to put
environmental, and social impacts; right the resulting harm.
–– Their substantive influence on the assessments and –– Potential: meaning those impacts that have some
decisions of stakeholders. likelihood of occurring in the future, recognizing that
these are often, though not limited to, those impacts that
Sustainability Accounting Standards Board (SASB) have occurred in the past.
According to the US Supreme Court, information is –– Negative: placing the focus on the avoidance of harm to
material if there is “a substantial likelihood that the human rights rather than unrelated initiatives to support
disclosure of the omitted fact would have been viewed or promote human rights.
by the reasonable investor as having significantly altered
the ‘total mix’ of information made available” (TSC Indus. –– Impacts on human rights: placing the focus on risk to
v. Northway, Inc., 426 U.S. 438, 449 (1976)) Integrated people, rather than on risk to the business
Reporting (IR).
29
8 Limited guidance for implementing
risk management framework
A survey of USBCSD and WBCSD member companies Companies customized ERM frameworks with the
attending a risk management workshop showed that follow to improve the suitability to their organization:
70% agreed that their current practices do not address
Extended the timeline for considering impacts and
sustainability risk and 44% agreed that the frameworks likelihood of risks.
need to provide more guidance to companies on how
to embed sustainability into ERM. Added examples of environmental and social risks to
the ERM manual to support the notion that these risks
In recent years, risk frameworks have evolved to should be considered in the ERM process.
capture more strategic risks. The most recent proposed
update to the Risk Management Framework, as set Enacted governance for cross-functional collaboration
out in COSO’s Enterprise Risk Management: Aligning to achieve a more integrated view of the enterprise
rather than a function-by-function specialization.
Risk and Strategy with Performance exposure draft
report37 has endeavored to address many of the
challenges companies are facing when it comes to
This suggests that ERM frameworks may be more
emerging, complex risk. Despite this, it has been shown
applicable for managing compliance and financial risk
that risk management frameworks, or the manner in
and that additional guidance is required to companies
which they are implemented, is limiting the extent to
to incorporate sustainability risk into the ERM process.
which sustainability related risks are being assessed
and managed.
In this study, many of the companies with the highest
alignment of sustainability risks to legal disclosures
used a modified ERM frameworks. Some stated that
“off the shelf” frameworks were inadequate for the
effective management of environmental and social risks.
37
COSO, 2016.
30
IV Expert opinions
on risk management
31
A Risk Intelligent View of the
Competitive Ecosystem
Rick Funston 39
39
ick Funston is the Managing Partner of Funston Advisory Services LLC, which specializes
R
in governance, operations and risk intelligence. In 2001, Rick created the concept of “risk
intelligence”. He is the principal author of Surviving and Thriving in Uncertainty: Creating the
Risk Intelligent Enterprise (Wiley, 2010). He is a former National Practice Leader for Deloitte’s
Governance and Risk Oversight Services. Rick is the editor of the Handbook for Public Pension
Trustees in the 21st Century (forthcoming, 2017).
32
Contribution to Risk Management
and Sustainability
Steve Lydenberg 40
40
Steve Lyndenberg is Founder and CEO at The Investment Integration Project.
33
Perspective on Sustainability
and Enterprise Risk Management
Allen L. White 41
41
llen White, PhD, is Vice-President and Senior Fellow at the Tellus Institute in Boston, MA.
A
He is Co-Founder and former CEO of the Global Reporting Initiative (www.globalreporting.org),
Co‑Founder of Corporation 20/20 (www.corporation2020.org), and Founder and Board Member
Emeritus of the Global Initiative for Sustainability Ratings (www.ratesustainability.org).
34
Sustainability Risk Management
– an actuarial approach
Nico Aspinall 42
0.035
0.025
Probability Density
0.02
0.015
0.01
0.005
0
20% 40% 60% 80% 100% 120%
Loss (£m)
35
Managing Sustainability Risks
of Enterprises beyond Techniques
Stefan Schaltegger and Roger Burritt 43
43
tefan Schaltegger is Professor of Sustainability Management and Head of the Centre for
S
Sustainability Management (CSM) and the MBA in Sustainability Management at Leuphana
University Lüneburg in Germany. Roger Burritt is Honorary Professor at the Fenner School of
Environment and Society, College of Medicine, Biology & Environment at The Australian National
University in Canberra, Australia.
36
V The way forward
With a foundational understanding of the
factors causing the breakdown in sustainability
risk management, the WBCSD proposes
a set of solutions that can be pursued both
by individual companies and through
WBCSD activities:
1. Enhance application of existing risk
management framework.
2. Develop risk management interpretive
guidance for sustainability risks.
3. Leverage capacity building and educational
work streams.
4. Understand and address disclosure gap.
37
1 Enhance use of risk management
frameworks to address these issues
This solution seeks to address the following breakdown factors in sustainability risk management:
Companies can at least partially address some of –– Establishing well-defined roles and responsibilities.
the factors discussed by enhancing the use of risk
management frameworks. While companies may have –– Integrating risk management in normal
implemented a framework in years past, there may be business processes.
need to update and refine these processes to enhance –– More structured and frequent risk communications to
risk management processes generally, or in particular key stakeholders and decision-makers.
the management of sustainability risks.
–– Improved ability to provide a comprehensive view
COSO’s recent public exposure draft report on of risk.
Enterprise Risk Management: Aligning Risk with
–– Use of scenario planning and stress testing to
Strategy and Performance44 provides guidance on a
analyze potential impacts on complex, emerging
number of issues that can address breakdown factors.
or global challenges.
Examples include:
–– Better alignment of risk objectives with strategic
objectives and opportunities.
–– A governance model that considers strategy and
business objectives.
–– Risk strategy considers business context.
–– Identifying opportunities as well as identifying
downside risk.
44
COSO, 2016.
38
2 Develop supplementary guidance for the
management of sustainability risks
This solution seeks to address the following breakdown factors in sustainability risk management:
The WBCSD will work with WBCSD member Proposed inclusions for the
companies, COSO, consultancies and academics supplementary guidance:
to produce a supplementary guidance document –– Application of sustainability risks across the risk
to support companies as they identify, quantify and management framework.
evaluate sustainability risks as part of ERM.
–– Examples of how companies are incorporating
Proposed activities include: sustainability risk.
–– Teaming with COSO, the organization that produced –– Guidance for companies on how to identify
the ERM framework most widely used by WBCSD emerging risks.
member companies.
–– Uniform risk management processes and a
–– Establishing a working group to provide input, common language between sustainability and
including existing leading practices and challenge risk professionals.
areas, and to provide feedback on drafts.
–– Guidance and tools to quantify sustainability risks.
–– Pilot testing features of the supplemental guide with
select member companies. –– Guidance on comparing sustainability risks to
traditional risks, including considerations for
–– Producing a supplement to the COSO ERM timeline implications.
framework.45
–– Guidance for mitigating sustainability risks.
–– Links to other related tools (e.g. International
Integrated Reporting Framework, Social and Natural
Capital Protocols).
The aim is to align the guidance with COSO’s 2016
Enterprise Risk Management: Aligning Risk with
Strategy and Performance public exposure draft
report.46
45
The supplement will support the COSO ERM update “Enterprise Risk Management: Aligning Risk and Strategy with
Performance”
46
COSO, 2016.
39
3 Leverage capacity building
and educational workstreams
This solution seeks to address the following breakdown factors in sustainability risk management:
As noted in the factor 1 discussion, the emerging To address the lack of collaboration across
nature of sustainable development has caused and sustainability and risk management professionals, the
will continue to cause challenges in moving the WBCSD encourages member companies to leverage
sustainable development agenda forward at large existing and future WBCSD capacity building and
companies. Risk management is no exception. educational programs and materials. Examples include:
Collaboration between sustainability professionals and
risk professionals can help close these gaps. –– WBCSD Leadership Program – an annual education
offering for business leaders to provide insight into
The WBCSD’s goal is to develop and share business and context to sustainability challenges for those
solutions for a sustainable world. As outlined in Figure leaders to engage in the development of business
18, business is the inner cog linking financial systems solutions back in their respective organizations.
with non-financial systems. Risk management,
decision-making, disclosure and integrated –– Emerging professional education efforts with relevant
performance management sit at the core of business professional bodies.
solutions that are important to delivering the shared –– Risk management seminars and conferences.
goal of sustainable value creation and development.
–– Sustainability events.
Shared goal
Sustainable value creation and development
Integrated valuation | Capital allocation based on SDGs | Market regulations to integrate sustainability
Social
capital
Regulators
Business
Risk management
Decision-making
Disclosure Natural
Integrated Non-financial capital
Governments performance system
Financial management
system
40
4 Understand and address
the disclosure gap
This solution seeks to address the following breakdown factors in sustainability risk management:
41
VI Conclusions
and next steps
42
This preliminary research suggests that the intersection of risk management
and sustainability is indeed fertile ground to improve both corporate disciplines.
Valuable information for risk management can be obtained when an
organization takes the time to:
–– Identify its stakeholders;
–– Solicit input on what is most important for their well-being; and
–– Prioritize that feedback against what the organization believes in can impact.
The fact that over one-third of WBCSD member companies determined that
none of the most important sustainability topics were material risks to investors
highlights the finding of this work to date: there is much to be done to bridge
this gap.
The interviews with select WBCSD member companies underline valid
hypotheses which should be explored in the next phase of this effort.
Specifically, the language and tools needed for risk managers, sustainability
professionals and other functional departments to evaluate, measure, manage
and disclose sustainability-related risks need to be developed, refined, pilot
tested and implemented.
Finally, the findings around how existing risk management frameworks are used
suggest that there is not a need to develop a new risk management framework
but rather to more fully use and leverage the existing COSO framework.
The WBCSD also recommends the development of interpretative guidance
designed for both the risk manager and sustainability professional to better
integrate sustainability into ERM.
Two external documents, sustainability reports and financial filings primarily
framed this preliminary research, using the risk disclosures as a proxy for
the ERM risk register. This assumed connection should be explored in
future research.
43
VII Appendices
44
A Appendix A:
Bibliography
45
B Appendix B:
Methodology
46
C Appendix C:
Glossary of terms
47
D Appendix D:
Acronyms
47
he listing of participative companies is omitted so as to provide descriptive examples
T
of information discussed.
48
COSO, 2016.
48
Acknowledgements
–– The generosity of the Gordon and Betty No representation or warranty (express or implied)
Moore Foundation is given as to the accuracy or completeness of the
information contained in this publication, and, to the
–– The risk management experts that have contributed extent permitted by law, the WBCSD, its members,
to this report: Rick Funston, Steve Lydenberg, employees and agents do not accept or assume
Allen L. White, Nico Aspinall, Stefan Schaltegger, any liability, responsibility or duty of care for any
Roger Burritt consequences of you or anyone else acting, or
refraining to act, in reliance on the information contained
–– Representatives from the 20 WBCSD member
in this publication or for any decision based on it.
companies that participated in the interviews that
influenced this publication Copyright © WBCSD, January 2017
–– Representatives USBCSD/WBCSD member Printed on paper containing fiber certified 100% to FSC
companies that participated in the workshops at Yale labeled paper according to the percentage average
in June 2016 method. 100% chlorine free. ISO 14001 certified mill.
–– Radley Yeldar for their work on the design of
this document. ISBN: 978-2-940521-71-5
49
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